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Foreigners\' databank soon to track tax evasion

Doulot Akter Mala | October 10, 2016 00:00:00


 Foreigners will come under a coordinated databank just after arrival so they could be traced until checkout and tax evasion by any of them prevented, officials said.    

They said a databank having networking with relevant nodal points would be developed under the National Board of Revenue (NBR).

 The NBR recently formed an 11-member technical committee to coordinate outsourcing of the databank-maintenance software.

 Its databank will interlink with the BIDA and the immigration authority so that the taxmen can find out the foreigners evading payment of tax.

Currently, the NBR has no such tool to trace foreign taxpayers and maintain their records through interlinking with the other departments.

 Headed by tax commissioner Sanjit Kumar Biswas, the technical panel will work under the steering committee formed earlier that comprises representatives of the ministry of home, Bangladesh Investment Development Authority (BIDA) and other relevant ministries.

 Currently, some 12,000 foreign nationals have tax files under the income tax zones under the NBR. Of them, 8,000 file tax returns annually.

According to the Income Tax Ordinance 1984, a foreign national needs to open tax file if he or she lives in the country for three months or 90 days a year.

 They also have to present their tax-clearance certificates from the NBR while crossing the immigration check-posts before leaving the country.

 Talking to the FE, one of the committee members said the NBR will develop its own databank software to trace the foreign nationals just after arrival in the country.

"Many foreign workers conceal information with the help of their employers to evade payment of tax," he said.

 They come with three-month work permit and get it renewed with the help of the authorities concerned, he added.

A temporary registration number (TRN) may be issued in favour of each foreign national, he said.

The official said a software-developing company will be hired for the databank preparation.

The technical committee will monitor and supervise the hiring process of the company.

 As per income-tax law, foreigners have to pay 30 per cent tax on their annual incomes. There is no tax-free threshold for them.

Last year, the government incorporated some provisions to check tax evasion by foreign nationals that came into effect on July o1, 2015.

Taxmen can penalise the employers if they recruit unauthorised foreign workers.

 Earlier, the NBR requested country's leading chambers and businesses not to appoint or employ illegal foreigners in order to avoid heavy penalty by the taxmen.

The government can slap 50 per cent additional tax or Tk 0.5 million (whichever is higher) on the persons or entities employing unauthorised foreigners.

Tax holiday and other tax-exemption facilities would be cancelled along with prosecution and punishment for these unscrupulous entities engaged in such unlawful acts.

In the budget speech on June 4, 2015, the finance minister had said despite the existence of large unemployment amongst country's eligible workforce, huge numbers of foreign nationals are being employed, most of whom are not under tax net.

Majority of the foreign nationals in Bangladesh are from India, Pakistan, Sri Lanka and China, according to official count.

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